Russia seeks to soothe Iran with energy pact

By Jessica Bachman and Katya Golubkova

MOSCOW (BestGrowthStock) – Russia mapped out plans with Iran on Wednesday for lasting cooperation on energy, aiming to soothe Tehran’s worries after Moscow backed U.N. sanctions against the Islamic Republic, where it has lined up major deals.

Moscow-Tehran relations chilled earlier this year as Russia improved ties with the United States, a forceful advocate of sanctions. Russian President Dmitry Medvedev has said Moscow was running out of patience with Iranian unwillingness to address Western fears over its nuclear programme.

On Wednesday, the Russian and Iranian energy ministers signed a “road map” outlining long-term energy cooperation and said they will aim to found a joint bank to help fund bilateral projects and expand cooperation in natural gas deliveries and oil products.

“Sanctions will not hinder us in our joint cooperation,” Sergei Shmatko said, when asked about joint projects after the signing ceremony with Iranian Oil Minister Massoud Mirkazemi.

Mirkazemi said the sanctions have had no impact on Iran because it had begun to rely even more on its own resources and said the measures were only damaging the activities of companies that were willing to work with Iran.

Russian oil and gas majors Gazprom, Gazprom Neft and LUKOIL , have signed billions of dollars worth of deals to help Iran develop its oil and gas fields but most projects are on hold because of sanctions.

Partly for this reason analysts have said Russia would try to walk a safe path between sanctions and its wish to maintain links with a fellow oil and gas power.

Shmatko also said Russian firms could supply Iran with refined oil products.

U.S. laws sanction any company worldwide that exports the motor fuel to Iran in an effort to deter Tehran’s nuclear enrichment activities. Iran says its nuclear activities are peaceful and not aimed at developing weapons.

Iran, dependent on imports to satisfy its citizens’ voracious appetite for state subsidized gasoline, has been shunned by many of its traditional suppliers, including independent trade houses and the trade arm of Russia’s No.2 oil firm, LUKOIL.

“We have not discussed trading operations, but if there is commercial interest and attractive terms Russian companies are ready to supply oil products to Iran without any doubt,” Shmatko said.

The text of the pact said the two countries would aim to increase cooperation in transit, swaps and marketing of natural gas as well as sales of petroleum products and petrochemicals.

“We are neighbors and if a big project to create a south-north transport corridor is implemented I believe that we will create long-term supply opportunities, including for oil products,” Shmatko said.

The two ministries also said they agreed “to prepare a broad joint road map for agreement on activities in power, nuclear energy and renewables”

The ministers will meet again in the fourth quarter of 2010 to finalize agreements.

Executives of major Russian and Iranian companies were present at the signing ceremony on Wednesday but agreed only two deals to boost cooperation.

The National Iranian Oil Company (NIOC) signed a protocol with Russian gas engineering company Cryogenmash to help it supply gas to 8,000 cities and villages in Iran with the use of liquefied natural gas technology.

Russian power engineering firm REP Holding signed a deal with NIOC to help modernize the Iranian oil industry. No further details were given during the signing.

(Reporting by Jessica Bachman, writing by Dmitry Zhdannikov and Melissa Akin, editing by Anthony Barker)

Russia seeks to soothe Iran with energy pact